It is an obvious trend that online video plays a more and more important role on the web. For example, videos occupy nearly 62% of the bandwidth of P2P websites. Meanwhile, video share platforms based on user generated contents, such as Youtube, are blooming now. With the booming of the online contents, now the users have much more choices than before to watch videos. Long Tail Theory is also applicable in the shift from traditional broadcast TV to online video watching, from passively accepting content to actively pulling content from multi channels. In this circumstance, advertiser pushing ads to the user in golden time or hot topic on TV will not work effectively because the user can choose which video content to pull now.
As to video advertising, it is not just simply a switch to a new online platform because the web is an interactive platform and can support some functions which TV platforms cannot, such as search. As such, something really new and big can breakout in the shift. American Advertising Federation (AAF)'s study in 2006 also shows that the leading ad executives of 500 top companies expect a significant portion of broadcast and cable TV ad dollars to shift to online video by 2010, with 33 percent of respondents predicting that the switch will be between 10 and 19 percent. In addition, 2007 budgets for online advertising are expected to rise by an average of 42 percent over 2006. Moreover, if the online video technology and model matures, it can also attract ad funding from other online ad forms, such as banner ads and literal link ads.
There are huge opportunities for online video advertisement; however, current ads models for online video have their limitations. Several types of advertising models can be found in the online video market. Usually, we can see video ads in top, bottom or side of a webpage. Apparently, the ads can have little relation with the page's content. Second, for a video platform like Youtube, video ads can be classified and made as a special channel. Users rarely click these ads intentionally. Thirdly, some people suggest that ads can be added in the head, tail or middle of a normal video, but it degrades the user experience and user can skip them. Finally, we can see that Adsense/Adwords combined with Youtube can bring out a new way for doing advertising. This means that each registered Youtube user can be an Adsense/Adwords user when a user uploads clips and then these clips are automatically linked with relevant ads. However, these relevant ads are still in character forms.
In the age of the Long Tail Theory, we consider Google's Adsense/Adwords to be a classic application to realize this theory in character form. Naturally, there exists a need for an ads application in the video form. If ads could be injected into video clips, then the ads will be watched by the end-user uninterrupted. This has multiple benefits: the end users can NOT bypass the ads when watching video; the ads are lively in the video contents which will get more focus and impression from the end users.